Tim Hortons launches credit card

Tim Hortons is double-doubling down on the fast-growing rewards space, formally introducing the Tims Mastercarcard on Monday. Tims first announced the digital-first card last month, saying that it would be fully integrated with its app for easy application, approval and management.

The coffee and donut chain has also created a new division called Tims Financial, which it said was created “to give Canadians convenient and powerful financial tools to manage their everyday finances.”  The new card, which resides under a “Tim’s Financial” tab on the app, is powered by fin-tech company Neo Financial.The Tims Credit Card is available NOW, offering quicker ways to earn more free Tim Hortons coffee, beverages and food (CNW Group/Tim Hortons)

Speaking with the CBC last month, Tim Hortons’ senior vice president of financial services and digital Markus Sturm said that with the Tims app already boasting functionality like mobile order and scan and pay, a new payment option was the next logical evolution. Tims says that the app, which debuted in 2017, has nearly five million monthly users.

The no-annual-fee card will enable users to earn Tims Rewards Points whenever they use the card, as well up to five points per dollar on groceries, gas, EV charging, taxi, rideshare and transit purchases, and 15 points per dollar at Tims.

In a release, Sturm outlined how a typical shopping day with the Tims credit card might yield dividends for cardholders. “Let’s say I spend roughly $80 at the gas station and use my Tims Credit Card to pay,” he explained. “I’ll earn 400 Tims Rewards Points for that purchase, and that’s enough points to pick up a free coffee from Tims right after I fill up.

“The Tims Credit Card unlocks so much value from your everyday spending so you can earn free rewards from Tim Hortons faster,” he added. “We even have a calculator available on our website to help estimate just how fast it is to earn points every month.”

Tims is also offering a secured card catering to new Canadians or those with low or no credit, such as students. A virtual version of both cards can be loaded onto payment systems including Apple Pay and Google Pay, while Tims is also issuing physical cards.

Store credit cards have risen in popularity in recent years, with brands including Costco, Canadian Tire, and Amazon all launching credit card options with the likes of Visa and Mastercard.

There was even a coffee counterpart to Tims in the U.S., with Starbucks and Chase introducing a Visa card in 2018. That program ended earlier this month after five years, with the companies saying in a statement that they made the mutual decision to “invest time and resources into other areas of our respective businesses.”

According to the payments research firm PYMNTS.com, more than one-quarter of Americans have at least one store credit card and an average of two per owner, with the company saying it expects the cards to “significantly surge” this year.

Tims did not immediately respond to interview questions about how the new card aligns with its business, but a 2021 study by McKinsey found that top-performing loyalty programs can boost revenue from customers who redeem points by between 15-25% a year, either by increasing purchase frequency, basket size, or a combination of the two.

“[E]nlarging loyalty-program participation can be a critical key to increasing company-wide sales, while creating the data foundation for other valuable initiatives such as data-driven marketing, and also improving the customer experience,” said the study.

“At Mastercard we know that Canadians are looking for powerful, versatile financial products that add more value to their everyday lives,” said Balinder Ahluwalia, senior vice-president, market development with Mastercard Canada. “We’re proud to provide Tims Mastercard credit card customers with an innovative, digital-first payment experience.”

Chris Powell